Acquisition of ISA CTEEP’s controlling block
On June 28, 2006 a public auction was held in the São Paulo Stock Exchange – BOVESPA, for the sale of 31,341,890,064 common shares issued by ISA CTEEP and held directly or indirectly by the Government of the State of São Paulo, which represented 50.1% of the common shares and 21.0% of ISA CTEEP’s total equity capital. In the course of this auction held by the Government of the State of São Paulo and until then ISA CTEEP’s controlling shareholder, ISA, the Company's parent company, submitted the winning bid of R$ 38.09 per 1000 common shares issued by ISA CTEEP.
On July 26, 2006 the auction’s financial settlement took place, with the acquisition by the Company of 31,341,890,064 ISA CTEEP common for R$ approximately 1.194 billion. On that same day the respective Share Purchase and Sale Agreement was entered into with the State of São Paulo, with the Company’s shareholders as intervening parties and guarantors of the Company’s obligations. The transfer of ISA CTEEP’s control was approved by the National Electric Energy Agency – ANEEL on July 25, 2006, pursuant to Authorizing Resolution no. 642, published in the Federal Official Gazette dated July 26, 2006. The acquisition price is subject to an adjustment as provided for in the ISA CTEEP Share Purchase and Sale Agreement, which will be calculated based on the amounts actually paid by ISA CTEEP in connection with the pension benefit supplementation for ex-employees, based on State Law no. 4819/58.
Further to the acquisition of ISA CTEEP’s controlling block, as provided for in the Notice, on that same date the Company paid the Government of the State of São Paulo the sum of R$ 19.357 thousand as an overprice for the shares acquired in the auction, in order to offset the discount granted in the shares offered to ISA CTEEP’s employees.
Pursuant to Notice no. SF/001/2006, the Company agreed to acquire any shares remaining from the common share offering held by the Government of the State of São Paulo in favor of ISA CTEEP’s employees. Hence, on September 12, 2006 the Company acquired an additional 10,021,687 ISA CTEEP common shares, representing 0.016% of shares of this kind, for R$ 229 thousand.
ISA CTEEP Public Share Acquisition Offering - OPA
Pursuant to article 254-A in the Brazilian Corporate Law and also as determined by Notice no. SF/001/2006, on August 24, 2006 the Company started the registration procedures at Comissão de Valores Mobiliários – CVM for the public share acquisition offering (“OPA”), of the ISA CTEEP common shares outstanding in the market, for a sum equal to 80% of the amount paid for ISA CTEEP’s controlling shares. The OPA registration was approved by CVM on November 27, 2006 and the respective notice was published on December 4, 2006.
On 9 de January de 2007, by means of an auction held in the São Paulo Stock Exchange (BOVESPA) the Company acquired 24,572,554,070 common shares issued by ISA CTEEP, which represented 39.28% of this kind of stock, at R$ 30.74 per 1000 shares, equal to a total sum of R$ 755,360 thousand.
As a result, the Company became the holder of a total of 55,924,465,821 ISA CTEEP common shares, representing 89.40% of its voting stock and 37.46% of ISA CTEEP’s total equity capital.